The excessively abundant supply of milk in India is expected to affect the international prices for dry milk powder. The recently offered government subsidies to support the local farmers of India are expected to increase export prices by nine fold.
India’s skimmed milk powder (SMP) exports are expected to increase up to 100,000 tonnes by the end of 2018 or in the start of 2019 fiscal year as the government incentives spur abroad, sales and increase transactions from the world’ biggest milk producers in the global market. In fact, the increased shipments from India could put pressure on the worldwide SMP prices, which have reduced by 50 percent in the last four years owing to the extra supplies. In addition, the export will help India reduce the inventories that are responsible for the reduction in local raw milk prices. The same reason has lead Indian farmers to start protests against the government.
As reported by Reuters, R. S. Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation Ltd, stated that right now India is not exporting a big quantity of milk. But the government subsidies will help to increase a coming month.
For Indian farmers, the dairy industry is a lifeline. Millions of rural farmer depend on the earning from milk export. In fact, Indian farmers earn more money from milk sale than any other goods sale such as wheat and rice. Therefore, the plummeted milk prices hammered farmers’ earning, which pressurized the authorities to act. If the government decided to act on it and help the farmer to meet the right prices for milk, the dairy industry in India will dominate the world, affecting the milk price from other leading markets such as the U.S. and Africa.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]